St. Thomas, Ontario and beyond

Ascent 2015 financial statement will spark your interest

It’s a much anticipated document and it can be found in the agenda for Monday night’s city council meeting.

We are referring to the city’s consolidated financial statements for 2015 which include details of its investment in Ascent Group Inc.

Not sure whether it is meant to offer reassurance to ratepayers, however that portion of the document opens with “The city owns 100% of Ascent Group Inc. which in turn owns 100% of St. Thomas Energy Inc., Ascent Energy Services Inc., Ascent Solutions Inc., Ascent Utility Services Inc., and Ascent Renewables.

Once you digest the Ascent Group financial statement we, as ratepayers, would be better off owning a fleet of wheezing Russian Ladas.

If you thought the 2014 Ascent picture was grim, hold on.

Its total assets at the end of 2015 are just shy of $53 million. That’s down from almost $67 million in 2014.

On the plus side, total liabilities are down to $52.2 million versus $66.8 million the year previous.

Do the math and the net assets ring in at $623,000. A paltry sum when you’re seeking a merger partner.

We’re just beginning.

Revenues for 2015 were $59.2 million ($99.6 million in 2014) and this is before Ascent began jettisoning excess baggage in earnest this year.

Go back to the calculators again and that translates to a $6.2 million loss in operations for 2015. Don’t forget Ascent also had a $6.9 million loss in 2014.

That’s a lot of red ink for the owners, that would be the City of St. Thomas and ultimately ratepayers.

As unsettling as that may be, here is where alarms go off.

The city contracts Ascent to provide billing and collection services for water and sewer user charges. For that, the city paid Ascent $318,000 in 2015. About a 10 per cent hike over the contracted fee in 2014.

But is Ascent turning over the money collected for that contracted service?

It appears not if the city is owed $8.3 million from Ascent Group at the end of 2015.

Is this water and sewer money the only thing that’s keeping Ascent Group afloat?

Remember we went through this in 2014 when Ascent owed the city $7.9 million from this collection service.

Exactly one year ago we asked city treasurer David Aristone about this outstanding amount and wasn’t it supposed to be turned over to the finance department.

“It’s supposed to be,” said Aristone at the time. “They (Ascent) may have had a cash flow issue that they couldn’t pay it to us.”

Seems like that ailment still lingers.

We called Aristone on Friday for clarification but did not hear back from him.

We would also like a clear answer to the question: As 100 per cent owners of Ascent, what is the total debt owing the city?

We previously speculated $20 million. Could it be as high as $30 million?

Ascent has been pared back to the bone this year, exactly where and how does the debt recovery begin?

POINT TO PONDER

Was the appointment of Nancy Whitmore to the position of president and CEO at St. Thomas Elgin General Hospital a unanimous decision made by the succession planning committee, formed in May of 2015 to seek a replacement for outgoing CEO Paul Collins?

And was the board of governors unanimous in endorsing Whitmore’s promotion?

The reason we ask is prompted by a letter sent our way that indicates the new CEO may not necessarily be the most popular kid on the block.

Not that the process of succession planning is necessarily a popularity contest.

However this quote accompanying the letter plants a seed of doubt.

“A bad manager can take a good staff and destroy it, causing the best employees to flee and the remainder to lose all motivation.”

Words of wisdom that likewise ring true in the corridors of city hall.

“I believe business has a higher calling and we’re not just here to make a profit. Certainly we do and we’re very proud of it. Profit is not a dirty word. Profit means we’re here for another year make a profit and to support the community we’re in.”

Bryan White who, along with brother Jason, own and operate Steelway Building Systems near Aylmer. He was addressing several hundred people Thursday, September 15, 2016 at Steelway’s 40th anniversary open house.

City Scope appears Saturday in the St. Thomas Times-Journal. Questions and comments may be emailed to imccallum@postmedia.com